An Autonomous Depreciation of the U

question 121

Multiple Choice

An autonomous depreciation of the U.S. dollar makes American goods ________ relative to foreign goods and results in a ________ in U.S. net exports,everything else held constant.

• A)cheaper;decline
• B)cheaper;rise
• C)more expensive;decline
• D)more expensive;rise

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Definitions:

Productive Efficiency

A state where an economy or firm produces goods or services at the lowest possible cost, using all resources effectively.

Production Possibilities Curve

A graph that shows the various combinations of outputs that a society can produce given the available factors of production and technology.

Specialization

The process of focusing on a narrow area of expertise or production, enhancing efficiency and skill through the division of labor.

High Consumption-Low Investment

This term refers to an economic situation where a country or entity spends a significant portion of its income on consumption rather than investing in capital goods that could contribute to future growth.